Share This Story!

Abrams: If Santa pitched a venture capitalist

Scene: A conference room at a major Silicon Valley venture capital firm. The firm's partners — VC for venture capitalist — are discussing a potential investment from an entrepreneur who recently pitched them.

Story Highlights

Scene: A conference room at a major Silicon Valley venture capital firm. The firm's partners — VC below, for venture capitalist — are discussing a potential investment from an entrepreneur who recently pitched them. Also attending is a chief executive of a micro-blogging site; a tech intern; and a secretary, who is taking notes and refreshing coffee.

VC No. 1: "Next, we have Dasher-Dancer Industries, headed by a guy named Santa Claus. It's in the toy space, already global, with high market penetration in the children's segment."

VC No. 1: Modernization. His database is a bunch of parchment scrolls. He's got rising costs of production. His work force is elves, and the European Union objects. The biggest problem is kids' gift expectations: they used to be happy with dolls and games. Now they want iPads and xBoxes.

VC No. 3: What's Santa's business model?

VC No. 1: He doesn't have one! He's stayed in business for centuries, capturing 100% market share without charging a cent. A totally unexploited customer base.

VC No. 3: How do we monetize that?

VC No. 4: The next big social media company — maybe "SantaBook" or "SantaChat?" To get a gift, a kid has to "like" Santa and upload pics or videos.

Santa's got a great following among the kiddie set, but marketers see a problem: He doesn't charge for his services.(Photo: Getty Images)

VC No. 2: Perfect for advertising. Toy companies would know exactly which presents each kid wants. Charge more to parents of kids who really, really want a particular toy.

VC No. 3: Could we convert this to a "freemium" model? Give kids one small gift but charge them for premium gifts? That's worked for cloud services.

VC No. 4: No, no. This is a big data play. Santa has information on every child in the world: Where they live, what they want, whether they've been naughty or nice. Wow! That's a massively useful database.

Tech intern: "We could turn that into an awesome app."

Secretary (the only woman in the room): "Have you talked with any children or moms about how they'd react if you monetized Santa? After all, they make up most of Santa's user base."

CEO of a major micro-blogging site: "I'm not going to talk to a mom just to check a box. Anyway, where could you find a qualified woman?"

VC No. 2: Of course, we'd have to bring in a CEO. If we're going to scale this, we need a guy who's run a big operation before. I know a former CEO of a fast-food conglomerate we could get if we give him enough stock and a big salary.

VC No. 5: "How about the sustainable energy angle? Santa manages to circle the globe with just reindeer. Reindeer food is a renewal energy source. How about building reindeer-powered vehicles?"

VC No. 3: "Could we get Elon Musk to run it?"

Santa could have a lot more money in his bags if he monetized his naughty and nice lists.(Photo: Getty Images)

VC No. 2: "Manufacturing! Bah, humbug. Building stuff takes too long to get us the sky-high returns on investment we've come to expect. Do you think this is venture capital from the 1980s? Stick with applications and social media."

Tech Intern: "We could make a really awesome Santa app."

VC No. 4: "We're overlooking an incredible resource Santa is literally sitting on, the North Pole. With global warming, the North Pole ice cap is shrinking, opening up new areas for mining."

VC No. 2: There are 2.2 billion children in the world. If we just monetize 1% of them, it's still a huge business.

VC No. 5: Let's look at those numbers a bit closer. More than 400 million of the world's children live in abject poverty, less than $1.25 a day. Every day 21,000 children die — 7.6 million a year — most from preventable causes; 57 million children globally are denied even a primary education. Even in America, nearly 16 million don't know if they'll get their next meal.

(The room goes completely silent.)

VC No. 5: What if instead of making children a market, we made them a cause? We could call it "Santa Cause," dedicating ourselves to helping children worldwide get out of poverty, and have access to education and health care. We could support groups like FeedingAmerica and the United States Fund for UNICEF.